Summary

The Excel YIELDDISC function returns the annual yield for a discounted security, such as a Treasury bill, that is issued at a discount but that matures at face value.

Purpose 

Get annual yield for discounted security

Return value 

Yield as percentage

Syntax

=YIELDDISC(sd,md,pr,redemption,[basis])
  • sd - Settlement date of the security.
  • md - Maturity date of the security.
  • pr - Price of security.
  • redemption - Redemption value per $100 face value.
  • basis - [optional] Day count basis (see below, default =0).

How to use 

The Excel YIELDDISC function returns the annual yield for a discounted security (non-interest-bearing), such as a Treasury bill, that is issued at a discount but that matures at face value. In the example shown, the formula in F5 is:

=YIELDDISC(C7,C8,C5,C6,C9)

with these inputs, the YIELDDISC function returns 0.03264023 which, or 3.26% when formatted with the percentage number format.

Entering dates

In Excel, dates are serial numbers. Generally, the best way to enter valid dates is to use cell references, as shown in the example. If you want to enter valid dates directly inside a function, the DATE function is the best approach.

Basis

The basis argument controls how days are counted. The PRICE function allows 5 options (0-4) and defaults to zero, which specifies US 30/360 basis. This article on Wikipedia provides a detailed explanation of available conventions.

Basis Day count
0 or omitted US (NASD) 30/360
1 Actual/actual
2 Actual/360
3 Actual/365
4 European 30/360

Notes

  • In Excel, dates are serial numbers
  • Settlement, maturity issue, and basis are truncated to integers
  • If settlement or maturity dates are not valid, YIELDDISC returns #VALUE!
  • YIELDDISC returns #NUM! if any of the following are true:
    • pr <= 0
    • settlement >= maturity
    • Basis is not 0-4
Dave Bruns Profile Picture

AuthorMicrosoft Most Valuable Professional Award

Dave Bruns

Hi - I'm Dave Bruns, and I run Exceljet with my wife, Lisa. Our goal is to help you work faster in Excel. We create short videos, and clear examples of formulas, functions, pivot tables, conditional formatting, and charts.